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Sharing economy – Digital platforms that change supply and demand relationships

The fastest growing global retailer does not have a physical sales point. The world’s largest taxi driver does not own any car. The world’s largest provider of accommodation does not own any real estate. What enables Amazon, Uber and Airbnb to rule the powerful economic sectors? The new economy, as the official Chinese government calls it. Sharing economics. Significant annual global growth of the sharing economy is estimated at 140%. The European Commission estimates the size of the sharing economy to € 350 billion by 2025.

The sharing economy is a socio-economic ecosystem based on the sharing of human and material resources and assets through digital platforms. It significantly influences the increase of efficiency, a better access to assets and resources, a relationship based on the exchange, use or rental of products and services, on a temporary or occasional basis, without the need for ownership. The leading companies of sharing economics are not the providers of the services themselves. They retain the role of connectivity, enabling, via digital platforms, cheap, secure, and simple transactions. Prerequisites for accelerated expansion of business models of sharing economics have accelerated the development of the Internet and its potential for scalable expansion.

The significant growth of sharing economics will depend on the user’s trust and the level of digital skills of a particular company. The most important obstacle to more significant development of the sharing economy is regulatory uncertainty. The economy we knew clearly was determined by the regulations that applied to the business sector that applied to the social activity of citizens. In the sharing economy, citizens become business entities. They are trading and renting their property, time, skills, work, knowledge. With the rapid growth of digital society, sharing economics and robotization, it is necessary to redefine the role of regulator, employer, employee, user, machine and man.

While indicators of the development of the sharing economy are growing steadily, concerns about how we should regulate and tax new business models are to define labor legislation within the digital economy. We are witnessing the risk of the emergence of obscure, obsolete areas in regulation that defines market relationships, often protecting existing markets and the organizations they govern. There is a need to establish a dialogue between policy-makers, the business sector, regulators and tax experts and the interested academic community with the aim of developing balanced measures, adopting smart regulation and stimulating and fair taxation and insurance systems. Delaying the definition of well-known and clear rules prevents further economic growth, business, flexible forms of employment, endangers public interest as a whole. Regulatory reform needs to be determined by the Government’s high priority. It is desirable to continue to carry out the analysis, assessment and measurement of the effects of regulations, started in about a dozen areas in 2015, by extending the government’s process of partnership with Sense Consulting to remove barriers to free market access and business operations.

Citizens and companies that rent their own property or own work can not be fully exempt from paying taxes or fulfilling reasonably established obligations, creating unfair competition for business entities that duly and legally meet administrative and fiscal obligations. Citizens service providers, digital platforms, business models that are based on the occasional and temporary grounds of sharing economics should not be treated in the same way as a hotel chain, a large corporation or a state monopoly. The application of custom and simplified rules to be applied to micro-entrepreneurs in traditional sectors should also be applied in the area of ​​sharing economics.

Recent events in Croatia, where politics, under the pressure of politically linked, at the concession monopoly of the lobbies accustomed to the calculation of the emergence of new business models, legal bans, administrative and (para) fiscal discrimination, endanger the openness and dynamism of the market, the choice of users. Global economic trends are unstoppable as well as the business transformation associated with them. Adapt or vanish, the mantra of today’s global business. We create quality public policies that enable the regulatory and business environment to develop, accept and utilize the potential of innovative business models that today lead the powerful economic sectors. The sharing economy is a new economy.

The author is a former assistant to the Minister of the Economy for Trade and Internal Market (2012-2016)

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